Mariana Resources Regulatory News (MARL)

25 Sep 2006 07:42

MARIANA RESOURCES LIMITED (Incorporated in Guernsey, Registered No. 44276) HALF YEAR REPORT 30 June 2006 ContentsChairman's Review 2Consolidated Income Statement 4Consolidated Balance Sheet 5Consolidated Statement of Changes in Equity 6Consolidated Cash Flow Statement 7Notes to the Financial Report 8The half-year report does not include all the notes of the type normallyincluded in an annual financial report. Accordingly, this report is to be readin conjunction with any public announcements made by Mariana Resources Limitedduring the interim reporting period in accordance with its continuousdisclosure requirement.Chairman's ReviewDear ShareholderI am pleased to report that Mariana has achieved a number of milestones overthe past half-year including the successful listing of the Company on theAlternate Investment Market in London (AIM: MARL). The listing took place on19th May and was coupled with the raising of GBP3.6M through the CompanyBroker, Haywood Securities (UK) Ltd. This was the culmination of a concertedeffort by Mariana and its Nomad, RFC Corporate Finance Ltd.Highlights - Six Months to 30 June 2006 * RFC Corporate Finance Ltd appointed Nominated Advisor. * Mariana Resources Limited registered in Guernsey. * Share swap results in former shareholders in the Australian company being issued 17.2M shares in Mariana Resources Limited and the Australian company becoming a wholly-owned subsidiary. * GBP3.63M gross funds raised with 18.15 new shares placed at 20p. * Mariana lists 35,354,838 shares on AIM on 19th May 2006. * John Sutcliffe appointed Managing Director. * Epithermal gold projects under preparation for drilling at Guanazan and Norcay (Ecuador) in October 2006 and later in the year at Sierra Blanca/ Caƒ±adon Largo (Santa Cruz, Argentina). * Target development progressing well at other projects in Ecuador and Chile. On the operational front, much effort is going into preparing key gold projectsat Guanazan (Ecuador), Norcay (Ecuador) and Sierra Blanca/Caƒ±adon Largo(Argentina) for drilling in the Fourth Quarter of 2006. This has involvedgeological and geochemical target definition work, liaison with localcommunities, permitting and importantly, securing appropriate drill rigs. Thisis painstaking work and I am pleased to say that excellent progress has beenmade in readiness for the drilling campaigns to come.An important personnel appointment was that of Miroslav Kalinaj as ExplorationManager. Miroslav is a great acquisition for Mariana, as he has extensiveexploration and resources assessment experience in Peru and Ecuador.The Mariana portfolio includes joint ventures with IAMGOLD Corporation(Ecuador, Argentina) and Anglo American (Chile). Targets are mostly epithermalgold deposits but one of the Anglo American joint venture properties hassignificant porphyry copper potential.Mariana is now well placed to advance its portfolio of quality gold andcopper-gold projects in highly prospective mineral belts in the AndeanCordillera of Ecuador, Chile and in the Patagonia Region of Argentina. Thedecision to acquire gold projects in Southern Ecuador in 2004 has beenvindicated by the discovery of world-class epithermal gold deposits at the FDNProject by Canadian junior Aurelian Resources (TSX-V: ARU) with drillintercepts up to 189m @ 24 g/t Au and at Quimsacocha by IAMGOLD Corporation(22.5Mt @ 3.9g/t Au).To conclude this brief review, the hard work over the past six months has laidthe foundation for a very exciting period ahead. The Company is now well fundedand Managing Director John Sutcliffe's team is committed to achievingexploration success.John HorsburghChairman25 September 2006.Consolidated Income StatementFor the half-year ended 30 June 2006 Consolidated Half-year 2006 ‚£ Revenue 4,861 Expenses Administration (95,975) Foreign Exchange loss (62,560) Loss before income tax expense (153,674) Income tax expense - Net loss attributable to members of Mariana Resources (153,674) Limited Pence Basic loss per share (0.4) Diluted loss per share (0.4) The above consolidated income statement should be read in conjunction with theaccompanying notes.Consolidated Balance SheetFor the half-year ended 30 June 2006 Consolidated Half-year 30 June 2006 ‚£ CURRENT ASSETS Cash and cash equivalents 3,139,549 Receivables 60,502 TOTAL CURRENT ASSETS 3,200,051 NON CURRENT ASSETS Property, plant and equipment 44,117 Exploration 504,532 TOTAL NON CURRENT ASSETS 548,649 TOTAL ASSETS 3,748,700 CURRENT LIABILITIES Accounts payable 28,536 TOTAL CURRENT LIABILITIES 28,536 TOTAL LIABILITIES 28,536 NET ASSETS 3,720,164 EQUITY Contributed equity 3,873,838 Accumulated losses (153,674) TOTAL EQUITY 3,720,164 The above consolidated balance sheet should be read in conjunction with theaccompanying notes.Consolidated Statement of Changes in EquityFor the half-year ended 30 June 2006 Consolidated Half-year 2006 ‚£ Total equity at the beginning of the period - Loss for the period (153,674) Total recognised income and expense for the period (153,674) Transactions with equity holders in their capacity as equity holders. Contributions of equity, net of transaction costs 3,873,837 Total equity at the end of the period 3,720,163 The above consolidated statement of changes in equity should be read inconjunction with the accompanying notes.Consolidated Cash Flow StatementFor the half-year ended 30 June 2006 Consolidated Half-year 2006 ‚£ Cash flows from operating activities Interest received 4,861 Payments to suppliers and employees (125,138) Net cash outflow from operating activities (120,277) Cash flows from investing activities Exploration expenditure (207,193) Net cash outflow from investing activities (207,193) Cash flows from financing activities Proceeds from issues of shares 3,633,600 Issue costs (476,363) Net cash inflow from financing activities 3,157,237 Net increase in cash held 2,829,767 Cash at the beginning of the period 309,782 Net cash at the end of the period 3,139,549 The above consolidated cash flow statement should be read in conjunction withthe accompanying notes.Notes to the Financial ReportFor the half-year ended 30 June 2006NOTE 1 General information and accounting policiesGeneral informationThese interim financial statements are for the period 31 January 2006 to 30June 2006. The company was incorporated in Guernsey on 31 January 2006;consequently there are no comparable accounts for the half year to 30 June2005.Following incorporation the company acquired all the issued capital of MarianaExploration Limited (formerly Mariana Resources Limited, incorporated inAustralia) by issuing one share in the Company in exchange for each share inMariana Exploration Limited. Subsequently the Company raised ‚£3,158,108 (afterissue costs) through an issue of 18,150,000 shares pursuant to an admissiondocument dated 15 May 2006. The shares were listed on the AlternativeInvestment Market of the London Stock Exchange on 19 May 2006.Accounting policiesThis general purpose financial report for the interim half-year reportingperiod ended 30 June 2006 has been prepared in accordance with InternationalAccounting Standard 34 (IAS34)This interim financial report does not include all the notes of the typenormally included in an annual financial report. Accordingly, this report is tobe read in conjunction with any public announcements made by Mariana ResourcesLimited during the interim reporting period. a. Basis of preparation of the half-year financial report These financial statements have been prepared under the historical costconvention. b. Segment Reporting The Mariana Resources Limited group has a single business segment, namelyminerals exploration. The group has activities in Ecuador, Chile, Argentina,Australia and Guernsey. c. Basis of consolidation The consolidated financial statements incorporate the assets and liabilities ofall entities controlled by Mariana Resources Limited since its incorporationand the results of all controlled entities for the period then ended. MarianaResources and its controlled entities together are referred to in thisfinancial report as the consolidated entity. The effects of all transactionsbetween entities in the consolidated entity are eliminated in full.Subsidiaries are fully consolidated from the date on which control istransferred to the Group. They are de-consolidated from the date that controlceases.The purchase method of accounting is used to account for the acquisition ofsubsidiaries by the Group (refer to note 1 (h)). d. Equity-based payments There was no equity-based payment during the half-year.The fair value of options granted is recognised as an expense with acorresponding increase in equity. The fair value is measured at grant date andrecognised over the period during which the recipient becomes unconditionallyentitled to the options.The fair value at grant date is independently determined using a Black-Scholesoption pricing model that takes into account the exercise price, the term ofthe options, the vesting and performance criteria, the impact of dilution, thenon-tradeable nature of the option, the share price at grant date and expectedprice volatility of the underlying share, the expected dividend yield and therisk-free interest rate for the term of the option.(g) Exploration and evaluation expenditureFor each area of interest, expenditure incurred in the exploration for andevaluation of mineral resources shall be expensed as incurred unless thefollowing conditions are met: * the company has a right to tenure; * the company is able to make a reasonable assessment of the existence of economically recoverable reserves or indicated resources; and * active and significant operations in the area of interest are continuing. Expenditure on the acquisition of mining tenements and other such rights are capitalised when incurred and carried as assets while they remain current. Each area of interest is reviewed for impairment at each reporting date andaccumulated costs are written off to the income statement to the extent thatthey will not be recoverable in the future or are impaired. If it isestablished subsequently that economically recoverable reserves or indicatedresources exist in a particular area of interest, resulting in the decision todevelop a commercial mining operation, then in that year the accumulatedexpenditure attributable to that area, to the extent that it does not exceedthe recoverable amount of the area concerned, will be transferred to minedevelopment. As such it will be subsequently amortised against production fromthat area.(h) Acquisitions of assetsThe purchase method of accounting is used for all acquisitions of assetsregardless of whether equity instruments or other assets are acquired. Cost ismeasured as the fair value of the assets given up, shares issued or liabilitiesundertaken at the date of acquisition plus incidental costs directlyattributable to the acquisition.(i) Property, plant and equipmentProperty, plant and equipment are stated at historical costs less depreciation.Historical cost includes expenditure that is directly attributable to theacquisition of the items.Subsequent costs are included in an asset's carrying amount or recognised as aseparate asset, as appropriate, only when it is probable that future economicbenefits associated with the item will flow to the Group and the cost of theitem can be measured reliably. All other repairs and maintenance are charged tothe income statement during the financial period in which they are incurred.Depreciation is applied in respect of all fixed assets excluding freehold landand is calculated using the straight line method. Capitalised explorationexpenditure is not amortised until production commences. Leased assets aredepreciated over the period of the lease or estimated useful life, whichever isshorter, using the straight line method. The expected useful lives are asfollows:Plant and equipment 5 -15 yearsThe assets' residual values and useful lives are reviewed, and adjusted ifappropriate, at each balance sheet date.An asset's carrying amount is written down immediately to its recoverableamount if the asset's carrying amount is greater than its estimated recoverableamount.Gains and losses on disposals are determined by comparing proceeds withcarrying amounts. These are included in the income statement.(j) Cash and cash equivalentsCash and cash equivalents includes cash on hand, deposits held at call withfinancial institutions, other short-term, highly liquid investments withoriginal maturities of three months or less that are readily convertible toknown amounts of cash and which are subject to an insignificant risk of changesin value.,.(k) Earnings per shareBasic earnings per shareBasic earnings per share is determined by dividing net loss after income taxattributable to members by the weighted average number of ordinary sharesoutstanding during the financial year.Diluted Earnings per ShareDiluted earnings per share adjusts the figures used in the determination ofbasic earnings per share by taking into account the after tax effect ofinterest and other financing costs associated with dilutive potential ordinaryshares and the weighted average number of shares assumed to have been issuedfor no consideration in relation to dilutive potential ordinary shares.(l) Interest income recognitionInterest revenue is recognised on an effective interest basis.(m) Contributed equityOrdinary shares are classified as equity.Incremental costs directly attributable to the issue of new shares or optionsare shown in equity as a deduction from the proceeds. Incremental costsdirectly attributable to the issue of new shares or options, are included inthe cost of the acquisition as part of purchase consideration.NOTE 2 SEGMENT INFORMATIONThe consolidated entity operates predominantly in the mineral explorationindustry, in Ecuador, Chile and Argentina.NOTE 3 CONTRIBUTED EQUITY Number of 2006 Shares ‚£ (a) Share Capital Number of shares on incorporation on 31 10,000 1January 2006 Shares issued to acquire Mariana 17,194,838 716,600Exploration Ltd Share placement in May 2006 18,150,000 3,630,000 Shares issued following exercise of options 50,000 3,600 Share placement expenses (476,363) 35,404,838 3,873,838 (b) Options Number of Options Unlisted Options 6,322,050 NOTE 4 EVENTS OCCURING AFTER REPORTING DATEMariana has issued 440,000 options expiring 31 May 2011 to employees of theconsolidated entity under the Mariana Resources Limited Employee Option Plan.The options have exercise prices from 24 pence to 30 pence. None of the optionsmay be exercised before 1 June 2007.Signed by authority of the Board.J. R. HorsburghChairman25 September 200611ENDMARIANA RESOURCES LTD